This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.
In the third quarter of 2019, M&A activity in the Smart Buildings space continued at the same level as in the second quarter, with 59 acquisitions recorded by Memoori by the end of September. This article provides a snapshot of some of the notable acquisitions in the building automation, proptech and smart home sectors during the quarter.
The Building Automation sector saw more Consolidation in Europe
In Germany, Bosch Building Technologies acquired GFR, as reported previously, complementing its building solutions portfolio. GFR offers complete building automation solutions and related services with a comprehensive hardware and software product portfolio. The company's solutions form the basis for sustainable building operations and are used in a wide range of industries, including shopping centers and hospitals. GFR's building automation system is also used in the entertainment sector. For example, the company provides the control center for the technical building equipment in Hamburg’s Elbphilharmonie. In addition to its headquarters in Verl in North Rhine-Westphalia, GFR has nine other branches in Germany.
In Finland, the industrial conglomerate Ernströmgruppen acquired the Ouman Group
and established itself as a major player in building automation in Northern Europe. Ouman develops, manufactures and sells products and services for building automation and energy saving measures in real estate and industrial facilities. They claim to be the biggest manufacturer of HVAC controllers in the Nordic countries and produce 1.2 million products annually. The company has a strong presence in Estonia, Sweden and Russia, with the main production plant based in Estonia. Ouman group has a total turnover of €35 million euro and approximately 300 employees.
Another Finnish based supplier, Produal Oy, a Nordic market leader in building automation measurement technology, signed an agreement to acquire SyxthSense Ltd, a United Kingdom-based company in advanced sensor technology for measurement and control in building automation solutions. The acquisition further widens Produal’s product offering in the building automation segment and expands the group’s geographical reach. Produal Oy is a subsidiary of Bemsiq Group in the Investment AB Latour’s business area, Latour Industries and forms an international group of companies providing innovative products and services for building automation and metering. Produal net sales in 2018 were €20.4 million euro.
SyxthSense's product range includes a wide offering of field devices and room controllers for building automation. The company had an annual revenue of approximately £2 million GBP in 2018.
In Switzerland, the Berne-based energy group BKW expanded into the market for ICT and building automation solutions, acquiring 100% of the Swisspro Group in Zurich. Swisspro, founded in 1999, has 18 locations throughout Switzerland, and employs more than 1,100 people. Turnover in 2018 was around CHF210 million francs. The company is primarily active in electrical installation and maintenance of building automation solutions for SME and industrial real estate as well as ICT solutions for business customers. According to BKW, the majority of the market for the digitization and automation of industrial and commercial real estate is dominated by large corporations headquartered abroad. Under the umbrella of BKW Building Solutions, a leading provider in Switzerland will emerge.
Proptech Software Startups Continue to Attract Corporate Buyers
In July 2019, WeWork, the co-working space provider, acquired SpaceIQ, a relatively
new market entrant founded in 2016 providing Integrated Workplace Management Systems (IWMS), that offers a cloud-based facility management software to companies, facilitating
the automation of such tasks as office space allocation and scheduling.
“SpaceIQ’s incredible team and technology will help us build on our existing
enterprise stack of workplace experience software and insights, and allow us to provide companies with workplace real estate management and optimization, including move management, space stacking, and richer portfolio analytics,” said Shiva Rajaraman, WeWork’s chief technology officer.
However, the well-publicized demise of their forthcoming IPO and the departure of the CEO appear to have overturned WeWork strategy of building up the firm’s software portfolio for enterprise customers and it has now been reported that a number of recent acquisitions, including SpaceIQ and Teem are to be sold.
Away from WeWork, Rifiniti, a US provider of advanced analytics for workspace optimization was acquired by FM:Systems, a leader in facility management software.
Jibestream, a Canadian provider of experiential wayfinding software and mapping technologies was acquired by Inpixon, an indoor positioning and data analytics company. The Jibestream solution, a full-featured geospatial platform that integrates business data with high-fidelity indoor maps to create smart indoor spaces.
Acquisitions in the Smart Home Sector
The significant deal in the quarter was the acquisition of Vivint Smart Home, one of the largest smart home companies, delivering integrated smart home products and cloud-enabled services to 1.5 million subscribers.
Mosaic Acquisition Corp. announced a merger agreement with Vivint in September 2019, creating a leading public company with an agreed initial enterprise value of $5.6 billion, anticipated revenues of $1.3 billion for fiscal year 2020 and adjusted EBITDA of $530 million, implying an adjusted EBITDA multiple of approximately 10.5x.
Memoori’s new research on M&A and Investments in Smart Buildings, H1-2019 is the most complete and up-to-date report tracking VC/PE funding and M&A in the global smart buildings space, with an analysis of notable deals and the most active investors and buyers during H1-2019, in comparison with the last 2 years. The H2-2019 report will be published in January 2020.